TOKYO - The government approved a long-awaited pension reform bill in a cabinet meeting on May 16th, aiming to eliminate the so-called "1.06 million yen barrier" that has prevented many part-time workers from enrolling in the welfare pension system.
While the proposal is positioned as a key step toward strengthening future pension benefits, it has sparked criticism for failing to include previously planned support for the so-called "employment ice age generation."
The central reform in the bill is the removal of the income threshold—commonly known as the 1.06 million yen barrier—that has limited part-time workers’ access to the welfare pension scheme. The measure is expected to expand eligibility for enrollment, thereby increasing the pension income of non-regular workers in the long run.
The Ministry of Health, Labour and Welfare’s financial review published last year projected that pension levels could decline by 20% over the next 30 years. In light of that forecast, the government had initially planned to bolster the basic pension component, particularly for those from the employment ice age—individuals who faced extreme difficulty finding stable work in the wake of Japan's post-bubble economic stagnation. However, that provision was removed from the bill following strong objections within the ruling Liberal Democratic Party, which viewed the proposed use of employee pension reserves as an inappropriate diversion of funds.
Criticism emerged swiftly from opposition parties. Kazuyasu Shimba, Secretary-General of the Democratic Party for the People, said: "We will keep a close eye on whether this becomes an empty bill shaped by electoral considerations. We want to ensure it genuinely helps the employment ice age generation."
Many in that generation experienced long gaps without welfare pension coverage, making their future pension outlook significantly worse than that of other age groups. Frustration among those affected is growing.
A man in his 50s working as a company employee said, "We’re the generation that lost the most. The bubble burst right after we joined the workforce, and salaries barely rose. Now, you see new hires starting with 300,000 or even 350,000 yen, but our generation got stuck in the middle and never got proper raises."
A man in his 40s who is self-employed shared, "I couldn’t get a job back then, so now I do delivery work. If I were living a typical life, I wouldn’t be able to save anything. Honestly, I don’t expect much from the pension system."
Yoshihiko Noda, leader of the Constitutional Democratic Party, pledged to push for revisions during deliberations. "The part about boosting the basic pension is missing," Noda said. "It’s like an anpan without any filling. We will demand changes to ensure the filling is included."
With only a month remaining in the current Diet session, fierce debate between ruling and opposition parties over the future of Japan’s pension system is expected to intensify.
Source: TBS
